CHEQUE PAYMENTS TO GET COSTLIER FROM TOMORROW

Making payments through cheques may become a costlier affair from tomorrow, as RBI has allowed banks to levy higher service charges for their clearing, especially of high-value and outstation cheques.

As per a RBI circular coming into effect from April 1, 2011, banks would be free to fix service charges on speed clearing of cheques of value above Rs 1 lakh.

At present, RBI does not allow banks to charge more than Rs 150 per cheque for speed clearing of cheques worth over Rs 1 lakh, while there are no charges for value up to Rs 1 lakh.

However, speed clearing of cheques with value up to Rs 1 lakh would continue to remain exempt of any service charges.

Speed clearing refers to processing of outstation cheques electronically and without movement of cheques from the presentation centre (city where the cheque is presented) to drawee centre (city where the cheque is payable).

For normal local clearing also, drawee bank can charge up to Rs 1.50 per cheque from tomorrow, as against Re 1 at present. For local clearing through cheque truncation system, which works electronically by processing the scanned image of the cheque, drawee bank can levy a service charge of Re 1 from tomorrow, up from 50 paise at present.

Besides, RBI has also given a free hand to the banks to decide on the service charge on outstation cheques of over Rs one lakh, as against a maximum limit of Rs 150 per cheque allowed currently.

However, RBI has decided to lower the service charge for outstation cheques up to Rs 5,000, by allowing a levy of Rs 25, as against Rs 50 currently.

The outstation cheques between Rs 5,000 and Rs 10,000 would continue to attract a fee of Rs 50, while those between Rs 10,000 and Rs 1 lakh would also continue to be levied a charge of Rs 100.

While fixing service charges not mandated herein, banks have been told to get approval from their boards for service charge structure.

"Charges fixed should be reasonable and computed on a cost-plus-basis and not as an arbitrary percentage of the value of the instrument. The service charges-structure should not be open ended and should clearly specify the maximum charges that would be levied on customers including charges if any, payable to other banks," RBI has told the banks.

The service charges by banks should be inclusive of all charges (postal, courier, handling, etc.) other than service tax, RBI said.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/cheque-payments-to-get-costlier-from-tomorrow/articleshow/7835448.cms

SBI OPENS 25,000TH ATM AND 9,000TH SEMI-URBAN BRANCH

The State Bank opened its 25,000th ATM and the 9,000th semi-urban branch, and said it will add 10,000 ATMs annually for the next three years.

The outgoing Chairman Om Prakash Bhatt said SBI had plans to deploy 10,000 ATMs every year over the next three years.

He inaugurated both these facilities at the SBI board room here through video conferencing, which was attended by the entire board of the bank, including RBI Deputy Governor Shyamala Gopinath. 

While the 25,000th ATM is located at south Mumbai's Girgaon, the 9,000th rural, semi-urban (Rusu) branch is at Sundargarh in Orissa's Bhubaneswar Circle.

Speaking at the occasion, Gopinath said though ATM was the most innovative product in the banking space, there was a need for an optimal ratio of technology and physical branches as rural customers still preferred physical branches.

Of the 13,500 plus branches, as much as 67 per cent are located in rural and semi-urban areas, Bhatt said, adding the State Bank Group has 25,000 ATMs, out of which SBI alone has 20,087. 

In the last two years alone, the SBI Group has put up as many as 13,596 ATMs. SBI's ATM network processes over 7.5 million transactions a day, disbursing nearly Rs 1,500 crore in cash. The State Bank has issued over 90 million debit cards and enjoys a market share of over 38 percent. 

From June 2006 to March 2011, more than 3,400 branches were opened by SBI alone, Bhatt said.

The State Bank Group now has 18,181 branches. In FY11, SBI opened 1,040 branches, including the merged branches of State Bank of Indore.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/sbi-opens-25000th-atm-and-9000th-semi-urban-branch/articleshow/7835730.cms

UNION BANK CUSTOMERS CAN PAY INCOME TAX THROUGH ATMS

Union Bank of India (UBI) customers can now pay their income tax through the automated teller machines (ATMs) of the bank.

This unique facility was launched at the hands of the Minister of State for Finance, Mr Namo Narain Meena, in the Capital.

The launch of this facility is yet another fulfilment of the brand promise of the Bank to provide choice of channel to customers for undertaking various transactions, Mr M.V. Nair, Chairman and Managing Director of UBI, said.

He said that customers of the bank, after one-time registration at the bank's portal, will be able to make their income-tax payments on ATMs. They will be able to generate their challan on Bank's portal. Registration for income-tax payment will also be extended through the bank's branches, he added.

Among those present on the occasion were the Revenue Secretary, Mr Sunil Mitra; the Financial Services Secretary, Mr Shashikant Sharma; the CBDT Chairman, Mr Sudhir Chandra; and the Controller General of Accounts, Mr Sundaramurti. Union Bank is among the few public sector banks that is offering the facility of payment of income tax through ATMs. The bank has an ATM network of 2,600 ATMs and a card base of 6.5 million. Plans are afoot to have 5,000 ATMs by end March 2012.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article1588332.ece

R SRIDHARAN TO OFFICIATE AS SBI CMD

Mr R Sridharan will officiate as Chairman of State Bank of India, following the superannuation of Mr O. P. Bhatt.

Mr Sridharan is currently the Managing Director of the bank.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article1588403.ece

OBC GETS RS 1,739.99 CR FUND INFUSION

Oriental Bank of Commerce (OBC) said it has allotted 4.12 crore shares to the government of India on a preferential basis in return for a Rs 1,739.99 crore fund infusion.

As a result, the government of India’s holding has increased to 58 per cent from 51.09 per cent, OBC said in a statement.

Shareholders of the bank approved a Special Resolution at an Extraordinary General Meeting yesterday for the issue and allotment of 4,12,21,482 equity shares of Rs 10 each to the government at Rs 422.11 a share, it said.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article1584840.ece

HDFC BANK OPENS 275 BRANCHES THIS FISCAL

In a bid to increase its footprint, HDFC Bank opened 275 branches in the current fiscal taking its total network to 2,000.

The bank had a distribution network of 1,725 branches in 779 cities as of March, 2010 which increased to 1,780 branches by the end of December 2010.

About 220 branches were added to the network in the last few months.

With the opening of new branches, the bank's reach has crossed 1,000 cities. Besides, the bank has overseas presence in Hong Kong and Bahrain.

As per the annual report for 2009-10, the bank opened over 300 new branches during the year. The bank's focus on semi-urban and underbanked markets continued, with 68 per cent of the bank's branches now outside the top nine Indian cities.

The bank, which has over 1.8 crore customers, acquiredCenturion Bank of Punjab leading to the integration of 404 branches in 2008.

For the quarter ended December 2010, the bank reported a 33 per cent growth in its net profit at Rs 1,088 crore compared to the same period a year ago.

Total income of the bank rose to Rs 6,357.8 crore at the end of the December quarter, from Rs 4,933.9 crore in the same period last year.

The bank's net interest income went up by 24.9 per cent to Rs 2,777 crore in the third quarter of the current fiscal.

The bank's net interest margin (NIM) remained static at 4.2 per cent in the third quarter. NIM, which is the difference between interest income of a bank and interest paid, was 4.4 per cent at the end of December 2009.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/hdfc-bank-opens-275-branches-this-fiscal/articleshow/7826820.cms

NEW ED FOR CANARA BANK

Ms Archana Bhargava, General Manager, Punjab National Bank, will take charge as Executive Director of Canara Bank on April 1. In PNB, Ms Bhargava has managed functions such as credit, human resource management, planning and development, financial inclusion, and international banking.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article1582288.ece

VIJAYA BANK ‘ADEQUATELY CAPITALISED FOR NEXT 2 YEARS'

Vijaya Bank, which recently got additional capital of Rs 368 crore from the Government of India, is adequately capitalised for the next two years, according to Mr. Albert Tauro, Chairman and Managing Director.

Govt holding

With the recent infusion, the Government holding in the bank will move up from 53.87 per cent to 57.7 per cent. Though the Government's plan was to move its holding from 58 per cent to 60 per cent, “we are not aware of the composition of the beneficiaries of the Rs 6,000-crore additional capital infusion planned for the next fiscal,” he added. According to him, if the Government plans to take it to 58 per cent, the bank might need about Rs 32 crore, and if it's 60 per cent, then the bank might need about Rs 250 crore.

However, going forward, tier-I capital could be an issue. “That is one thing we should be constantly watching,” said Mr Tauro. As of March this year, the bank's current tier-I capital could be 9.5 per cent. He added that as per Basel III guidelines, if the innovative perpetual debt (IPD) and perpetual non-cumulative preference shares (PNCPS) move out of tier-I capital, “there could be some pressure”. Of the 9.5 per cent tier-I capital, the bank's PNCPS was Rs 1,200 crore. Since Basel III will come into effect in 2017 or 2018, he expected that the bank would not face much of an issue.

SOURCE: http://www.thehindubusinessline.com/todays-paper/tp-money-banking/article1579940.ece

SBI OPENS AFFORDABLE HOUSING LOAN CELL

State Bank of India, on Tuesday inaugurated its first 'affordable housing loan' cell in Mumbai, which will provide a platform for its customers to interact with the bank.

The bank has initiated this as a pilot project in association with a few builders operating in the affordable housing segment, a press release issued here said. The first facility has been set up in Nalla Sopara where the bank has its branch, the release said.

"The facility will be set up near localities where affordable housing projects are undertaken. The cell is a distinct delivery structure, which has been designed to offer a simple model for appraisal/sanction methodology suited to the segment," a bank official said. 

The demand for affordable houses has not been met due to various reasons including inadequate supply of houses as well as absence of credible builders in this field, the release said. To begin with, the focus would be on loans in the range of Rs 8-15-lakh.

The bank would also provide ATM facility and Internet kiosks at the sites where such cells would be opened, the release said. Customers would also have the facility of making cash payments after business hours through a customer service point of a banking correspondent at a nearby location, it said.

However, disbursement of loans would be made only through the the bank's branches.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/sbi-opens-affordable-housing-loan-cell/articleshow/7816171.cms

RBI OFFICES TO FUNCTION AS USUAL ON APRIL 1

The Reserve Bank of India said on Tuesday its offices in Mumbai and Navi Mumbai will function normally on April 1.

The government of Maharashtra has declared April 1 as a bank holiday to facilitate annual closing of banks' accounts.

Commercial banks will remain closed for public transactions on that day, the RBI said.

SOURCE: http://www.business-standard.com/india/news/rbi-offices-to-function-as-usualapril-1/130572/on